In extremely bearish market, an exceptional growth stock can fall up to 50% or even more but still it can make a successful breakout.

As a general rule, shallower cup is better because it shows that big hands are catching the stock. But, cup pattern with excessive depth should always be avoided.

Additionally, the cup base that is “V” shaped instead of “U” shaped pattern is also likely to fail. It is perhaps due to absence of necessary consolidation needed to shake weak shareholders before an anticipated uptrend.

Thus, traders or investors should avoid making positions in cup that are too deep or having “V” shaped bases.

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